Digital Freight Matching Boosts Cross-Border Trade

Q: How does Fr8App contribute to the Mexican logistics sector? 
A: We are a traditional third-party logistics company (3PL) focused on technology. Being a logitech has several advantages. We are much more agile and efficient in our operations, for example, and we can supply technology to our customers as well as monitor all their cargoes and trucks, regardless of the GPS system used by the carrier. All this is done on one screen and from one command center, which really adds a great deal of value to customers. 

We do not own trucks. We like to present ourselves as “the Uber of trucks” since we connect companies with tuck owners. 

Today a broker provides different carriers with many units and each carrier uses a different monitoring method. This results in the customer ending up with 25 mirror accounts to measure different parts of the operation. Our goal is to digitize the entire documentation process. We specialize in border crossings and all documents related to border crossings, including PODs and the rate confirmations for the carriers, which are a 100% digital part of our service. Our services represent savings in paper use and from more efficient and cost-effective operations. 

Q: How is the logistics sector doing in terms of the adoption of digital platforms like Fr8App? 
A: It differs greatly depending on our two markets, Mexico and the US. In the US, there is much greater acceptance on the part of customers. They have much more integrable TMS systems, with platforms that can be integrated with ours more easily. 

In Mexico, there is more resistance to the adoption of such technology. However, we are pushing hard to make clients more comfortable with our platform. We have identified some specific reasons that limit acceptance. For instance, some Mexican operators may not want to use technology because it consumes too much mobile data or they do not want to be locatable. Traceability is key for security reasons, however. We need to know where the cargo is at all times, which sometimes is difficult due to poor cellphone coverage in certain areas of the country, which is why we are looking to integrate our solution into the units’ GPS systems. 

Q: Who are Fr8App’s main competitors and how does the company set itself apart from the competition? 
A: At first, you might think that our main competitors are traditional logistics companies. However, with the proliferation of new technologies, our real competitors are other logitech companies. There are few digital logistics companies, such as Uber Freight, working in Mexico, which puts us in a favorable position as there is much less competition in our niche.

In terms of traditional 3PL, I would say that we have two main differentiators. The first is our carrier network. By having everything digitized on the platform, we have a much larger network of carriers than a traditional logistics company, which relies on a human team that makes phone calls, sends emails and tries to find trucks. We can automatically send proposals to many carriers at the same time and we have greater capacity to react, which allows us to offer more capacity to our clients. 

Our second differentiator is the technology we use. Some logistics companies in Mexico still report where the truck is by phone or WhatsApp. With our platform, clients can see where each unit is on the map as well as the details of each load. 

Q: What is Fr8App’s coverage in Mexico? 
A: We started as a cross-border operator. As we grew, our customers asked us if we could also help them with domestic routes, which prompted us to enter the domestic freight market in both the US and Mexico.  

Our growth and penetration in Mexico have been organic. It is true that we have many operations in the north but our domestic customers are from the central region. We have many clients in the Bajio area, which is developing rapidly, and in the center of the country. We are now exploring the Merida market as customers are building factories in Yucatan. The area is not that advanced in terms of digitization, which gives us an opportunity to grow the market. 

Q: How will nearshoring impact Fr8App’s operations? 
A: Nearshoring came at a great time for the company. We started to grow when the pandemic began and that is when we strategically decided to shift our focus away from the US and toward Mexico. Companies in China began to shut down and people did not want to import from China anymore, as they preferred doing it from Mexico. Our organic growth strategy has been to focus on Mexico. I even moved from the US to Mexico and our management team is all here, which greatly differentiates us from our US-based competitors. 

Some factors that could boost our operations are projects like the Interoceanic Corridor and the Mayan Train, since they have the potential to transform Mexico into a logistics hub. However, we must evaluate the real capacity to transport goods. For instance, the Mayan Train will boost goods transportation but the number of train stations is limited, which is where our services come into play as goods must be transported to cities. 

Q: How is the company contributing to a more sustainable logistics sector? 
A: We contribute to what I consider the two most polluting aspects of logistics operations: paper use and empty miles. We have reduced paper consumption to zero. Also, our app has a feature that if exploited properly could mean cost savings and a positive environmental impact. Empty return trips cost resources, eating away at the profit the company made on the outbound trip. Fr8App searches for other cargoes at the point of origin and, if there is none, at the destination of the original shipment. This allows drivers to fill up their trucks throughout their entire trip, making money while reducing the carbon footprint of trucks moving empty.

Q: What are Fr8App’s plans for 2023? 
A: Mexico is where we are growing the most and where we expect to continue developing our business. This year, we have closed agreements with some of the largest companies in the world and we want to expand our network of truck drivers to create a dedicated fleet. We are already doing this with some clients, with one of them having around 60 dedicated trucks with us. We want to replicate this model for other Mexican clients, ensuring capacity for them and guaranteeing those truck drivers, who have made an investment in their trucks and sometimes struggle to keep their business afloat, sufficient cargo volume from big clients so they can continue operating and growing their operations.